Refer to the diagram for a private closed economy. The equilibrium GDP is:
A. $60 billion.
B. $180 billion.
C. between $60 and $180 billion.
D. $60 billion at all levels of GDP.
B. $180 billion.
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The minimum level of net investment necessary to maintain the stock of capital depends on
A) the rate of interest and the size of the capital stock. B) the rate of depreciation and the size of the capital stock. C) the corporate profits tax and the interest rate. D) business confidence and the corporate profits tax.
Using economic analysis to help understand world issues
a. assumes that all decision makers use detailed economic analysis b. highlights the role of choice when resources are scarce c. has unlimited application d. is not appropriate because reality is too complex for economic modeling e. typically enables one nation to gain only when another nation loses